Life Insurance Corporation of India vs JASHVANTIBEN RAMESHCHANDRA JAISWAL

-THIS appeal arises from order dated 30.6.2003 rendered by the learned Consumer Disputes Redressal Forum, Junagadh in Forum Case No. 601 of 1993 directing the opponent Life Insurance Corporation of India to pay to the complainant policy amount of Rs. 50,000/- with 12% interest from 27.11.1992 till payment within three months failing which to pay interest @ 18% from the said date and cost in the sum of Rs. 2,000/-. We have heard the learned Advocates for the parties. We have gone through the impugned order. We have gone through the material placed on the record of the case.

IT would appear that deceased husband of the complainant (Rameshchandra Babulal Jayswal) had taken life insurance policy in the sum of Rs. 50,000/- on 10.12.1989 and he died on 4.9.1991 on account of blood vomiting and hypertension. Complainant preferred claim before the opponent LIC of India who repudiated the claim on the ground that the insured suffered from ailment of diabetes mellitus and cirrhosis of liver prior to the date of taking of insurance and said fact was suppressed from the opponent LIC of India while making proposal for the policy of insurance. The learned Forum came to the conclusion that the burden of proof was on the opponent LIC of India with regard to establishing suppression of material facts as aforesaid and by not examining the concerned doctors that burden has not been discharged. The learned Forum came to the conclusion that the certificate issued by Dr. N.D. Nanavaty indicated that the ailment which the insured suffered from was existing prior to the date of certificate dated 3.6.1989, however it was not stated since when the insured was suffering from such ailment and when he was discharged from the hospital his health was fair. Under the circumstances, when the form was filled in deceased insured had no fraudulent intention in saying that his health was good. After considering the decisions which were referred to, the learned Forum came to the conclusion that there was deficiency in service on the part of the opponent LIC of India and passed the impugned order. The facts which were placed before the learned Forum are also not disputed before this Commission. Proposal form for insurance policy in the sum of Rs. 50,000/- was filled in and submitted on or around 10.12.1989. The insured had died on 4.9.1991. Cause of death as stated above is stated to be diabetes mellitus and cirrhosis of liver. Opponent LIC of India has produced three documents at Exh. 11 which were admitted in evidence upon the endorsement having been made by the learned Counsel for the complainant. Thus, the documents were accepted in evidence and further evidence or explanation was required from the side of the complainant. The burden set out in Section 45 of the Insurance Act stood discharged upon admission of exhibited documents which were received in evidence at Exhs. 29, 30 and 31 which were certificates from Dr. Nanavaty Hospital indicating that the insured was admitted to the hospital on 25.5.1989 and discharged on 3.6.1989. He was also admitted to the hospital on 3.9.191 and died on 4.9.1991. It is recited in the history of the patient that he was taking alcohol and on first occasion of his admission diabetes and cirrhosis of liver came to be diagnosed. Now, these facts have gone in evidence. What, therefore, was required was an explanation with regard to whether the insured did know about the nature of the ailment he was suffering from the month of May/June which period was prior to taking of insurance (10.12.1989). That has not been done by the complainant. Therefore, factually, the deceased-insured was suffering from diabetes mellitus and cirrhosis of liver prior to the date of taking of the insurance. It is in this background that the question of law which has been agitated on behalf of the complainant needs to be considered. Section 45 of the Insurance Act has been canvassed for making submission that once the repudiation of claim is outside the period of two years from the date of taking of policy, the policy cannot be questioned. The decision of the honourable National Commission in the case of LIC of India v. Mohinder Kaur, reported in II (2003) CPJ 30 (NC)=(2003) 4 CLD P. 317, has been canvassed. It would be appropriate to deal with question by making referene to said decision.

After reproducing the provisions of Section 45 of the Insurance Act and decision of the Apex Court in Mithoo Lal Nayak v. LIC of India, reported in AIR 1962 SC P. 814, as well as decision of the Punjab High Court in Lakshmi Insurance Co. Ltd. v. Bibi Padma Wati, reported in AIR 1961 Punjab 253, the Honourable National Commission has observed as under: "There can be no dispute that repudiation letter was issued after expiry of two years from the date of insurance being effective i.e., 28.8.1995 hence exceeding the period mentioned in Section 45 of the Insurance Act. In order to avoid Section 45 or to circumvent the provisions of this section, "Fraud" had to be proved. What we see on record is a document signed by one Doctor containing reference to the insured having the said ailments. This document is not proved by any method nor supported by any affidavit leaving it at best, an unproved document. It is not doubt understood that evidentiary value of such a document is little, as the report of Dr. Hardev Singh was challenged at all Forums by the complainant. If fraud or deliberate withholding of information, which was within the knowledge of the insured, has to be made the ground of repudiation or revision petition before us, then this has neither been alleged much less proved by the petitioner. On this point of law alone, which goes against the petitioner, we must reject this revision petition as being devoid of merits. This revision petition is dismissed. Parties to bear their own costs."

IN the present case, although repudiation is clearly outside the period of two years as contemplated under Section 45 of the INsurance Act, there is suppression of material fact which has not only been canvassed before the learned Forum but has been established as stated above. IN this view of the matter, the decision referred to hereinabove will not be applicable on principle. Section 45 of the INsurance Act does not merely speak about policy of life insurance to be not called in question after the expiry of 2 years from the date on which it is effected but it further speaks about the qualification that even in that case it could be questioned if the statement that was made while taking insurance was of a material fact or suppression was of a material fact which was required to be disclosed and was fraudulently made or suppressed. The provision of Section 45 of the INsurance Act has got to be read as a whole. It is for that reason that the Honourable National Commission has referred to both the decisions which were submitted for its consideration. As stated above, in the present case, the opponent LIC has established the case of suppression of material fact which had nexus with the cause of death. If that is so, decision of the National Commission in the case of LIC of INdia and Another v. Parveen Dhingra, in II (2003) CPJ 70 (NC)=Revision Petition No. 897 of 2001, decided on 15.3.2002 will clearly be applicable. IN that case also Section 45 of the INsurance Act has been considered. While reiterating the principle that insurance has been held to be a contract of utter good faith, the National Commission has reproduced following observations from the decision in LIC of INdia v. Smt. S. Vijya, I (1995) CPJ 122 (NC). "It is evident that in the personal health statement submitted by the insured just prior to the revival of policy, he had suppressed the material facts concerning his health. As such, the repudiation of the policy by the Life INsurance Corporation was fully warranted and there has been no deficiency in service because of such a repudiation. IN the result, this revision petition is allowed. The order of the State Commission is set aside and that of the District Forum is restored. There is no order as to costs."

IN our considered opinion this decision makes the position of law clear. Reference, however, has also been made by the learned Advocate for the complainant to a recent decision of the Honourable National Commission in the case of LIC of India v. Smt. Chandra Baghrecha, reported in IV (2003) CPJ 16 (NC). In that revision petition, the National Commission has held as under: "Petitioner was the opposite party before the District Forum on a complaint filed by the respondent, widow of the insured. Her claim under insurance policy was repudiated on the ground that the insured had concealed his illness before taking the policy. However, it has been recorded by the State Commission that insurance was accepted only after insured was thoroughly examined by the doctor of the Insurance Company itself and moreover the reliance by the Insurance Company has been placed on the report of Dr. Parveen Nehar but it is recorded by the State Commission that neither there is any affidavit of Dr. Parveen Nehar nor any prescription slip has been produced for any treatment even by Dr. Parveen Nehar, State Commission, therefore, did not rely on the report that the insured, husband of the respondent, was suffering from any illness which is stated to be concealed. In the circumstances, we do not find any merit in this revision. It is dismissed."

IT would appear from the aforesaid excerpted decision of the National Commission that the claim of the consumer was repudiated after passage of two years and the State Commission recorded a fact that the insurance was accepted only after the insured was thoroughly examined by the doctor of the Insurance Company itself and report of Dr. Praveen Nehar which has been relied on by the Insurance Company was not proved by filing affidavit of the said doctor and by producing any prescription slip. In our considered opinion, this decision will hardly have any application on principle. Further, as per Section 58 of the Evidence Act, facts which are admitted are not to be proved. In the present case, facts as appearing in Exhs. 29, 30 and 31 stood admitted as above. In view of aforesaid circumstances of the case, we have no other alternative except to set aside the impugned order and pass following order: ORDER Impugned order dated 30.6.2003 rendered by the learned Consumer Disputes Redressal Forum, Junagadh in Forum Case No. 601 of 1993 is hereby set aside. Forum Case No. 601 of 1993 is hereby dismissed. This appeal is allowed with no order as to costs. 2. The amount of Rs. 25,000/- stated to have been deposited by the appellant LIC of India in this Commission be verified and paid over to the LIC of India by A/c payee cheque. Appeal allowed.